Highland Hospitality Corporation Finalizes Insurance Settlement and Sells Barcelo Tucancun Resort
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Highland Hospitality Corporation Finalizes Insurance Settlement and Sells Barcelo Tucancun Resort
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Category: Central and South America -
This is a press release selected by our editorial committee and published online for free on 2006-09-05
Highland Hospitality Corporation (NYSE: HIH), a lodging real estate investment trust, or REIT, announced today that it has finalized the settlement of its insurance claim for the 332-room Barcelo Tucancun Beach resort located in Cancun, Mexico for a total of approximately $9 million in proceeds, all of which has been received to date.
The Barcelo Tucancun Beach resort was significantly damaged by Hurricane Wilma in October 2005, and was closed until April 22, 2006 while the Company rebuilt the sea wall, repaired the lobby, restaurant and other common areas located on the main floors of the resort, reconstructed the exterior pools and fixed portions of the hotel room towers and exterior roofing.
In addition, the Company announced that it has sold the Barcelo Tucancun Beach resort to Playa Hotels & Resorts, S.L., a related party, for $38 million. Playa Hotels & Resorts, S.L. is a private equity fund focused on investments located in the Caribbean and Latin America and partially-owned by Barcelo Hotels & Resorts. Barcelo Crestline Corporation, a wholly-owned subsidiary of Barcelo Hotels & Resorts and the Company's preferred operator managing 45% of the Company's hotel rooms, advises Playa Hotels & Resorts, S.L. in evaluating investment opportunities. Highland's non-executive Chairman, Bruce D. Wardinski, is the Chief Executive Officer of Barcelo Crestline and the Chairman and Chief Executive Officer of Playa Hotels & Resorts, S.L. The sale of this resort has been unanimously approved by Highland's Board of Directors upon the unanimous recommendation of a special committee of Highland's independent directors.
James L. Francis, Highland's President and CEO, stated, "The sale of the Barcelo Tucancun Beach resort exemplifies our shift in strategic focus toward opportunities located in the top U.S. markets. The insurance and sale proceeds received have enabled us to recoup our investment in the property and sell the asset for a gain."
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